It’s hard to say what constitutes “unfair” competition in a marketplace in which anyone with a browser is free to switch from Google’s search engine to Bing, Yahoo, or lesser known but differentiated competitors like DuckDuckGo. Yet Google now represents 67% of all searches in the US, an all-time record.
Every time complaints about Google becoming a monopoly gain sufficient momentum, the company tweaks its business practices just enough to satisfy regulators, without changing its competitive landscape in the least. That’s what the company appears to have accomplished in its latest resolution of a potential antitrust action from the US Federal Trade Commission. Here’s why its various concessions don’t matter all that much.
1. Advertiser lock-in, and why it’s mostly irrelevant
Advertisers will soon be able to export all their data from Google’s Adwords system to competitors’ advertising platforms. This is great for advertisers who want to experiment with, say, Facebook, but does little to change the fact that Google.com is where their target audience is. Countless studies have shown that people using search engines to shop for bargains are at a uniquely valuable period in the cycle of deciding on a purchase.
2. How search results are displayed, and how the FTC misses the mark
Yelp (local reviews) Expedia (travel), and Nextag (shopping) have all complained that Google buries results for their sites deep in its search results, favoring its own offerings. Google’s concessions to the FTC will apparently address this. But unless the remedy includes the elimination of Google’s enhanced search results—all that cruft that appears above and to the side of conventional search results, such as stock charts, maps, and Wikipedia-style summaries from Google’s increasingly international Knowledge Graph—these concessions hardly matter, for two reasons.
First, there’s Google’s case that providing scannable information on the first page of search results is only to the benefit of users and a logical extension of Google’s function as an organizer of all the world’s information. Entire search engines, like Bing and Wolfram Alpha, are built around the idea that giving what users want without them even having to click through to a page listed in search results is a valuable differentiator. So it’s very unlikely that the FTC is going to ask Google to eliminate this functionality.
Unfortunately, this will always privilege Google’s results above some of its competitors. For example, with Google’s acquisition of Zagat, it only makes sense that below the location, phone number and hours of a restaurant displayed on the first page of Google’s search results, its Zagat rating should also appear. For restaurants in Zagat, this eliminates, to some extent, the utility of Yelp.
Second, there’s the problem that, despite protestations about the “objectivity” of Google’s search results, it has always been the case that Google’s results are editorial in nature. Humans shape Google’s algorithms, and those algorithms are the embodied logic of the engineers who are constantly tweaking Google’s search rankings. As long as Google isn’t pushing all of its competitors off the first page of search results, the company can plausibly deny that tweaks to its algorithms are punishing any one competitor. Without a detailed—and ongoing—accounting of exactly how every competitor is weighted in Google’s rankings, only the most egregiously anti-competitive algorithm tuning could draw the FTC’s ire.
3. In an age where summaries are content, Google will have to change how it uses competitors’ content
Its not clear yet which kinds of information this concession to the FTC will affect. But in echoes of Google’s battle with the newspaper industry in France and other European countries, it appears that Google’s summaries of data from yet-to-be-announced competitors will have to change. This is the one area where the FTC might actually make some headway. If the point is that Google’s summaries of competitors’ data keep users from clicking through to those sites, allowing Google to capture most of the value generated by competitors, it could make a material difference to someone (other than Google’s) bottom line.
4. Google’s overall effort to keep users on Google.com longer could turn many of its competitors into mere features of the Google empire
What Google’s adversaries really fear is that efforts like Google+, Google’s efforts to attach reviews to any location in its maps database, Google’s shopping and ecommerce efforts, etc., will eventually create a situation in which users can start and end their quest for information without ever leaving the beneficent embrace of Google’s many tools. Unfortunately, it’s hard not to see that happening, and that’s where Google’s real monopoly power lies.
The FTC can try to throw speed bumps in the path of Google’s creeping dominance, but short of regulating Google’s search results as if they were a utility like telephone service or the internet itself, it’s hard to see how regulators can prevent Google taking over in some areas, like maps.
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